Africa-Israel Residences, a subsidiary of housing giant Africa-Israel Investments, published its financial report for the fourth quarter and full year of 2008 on Sunday. The company's housing sales rose more than fourfold to NIS 422.7 million in 2008 from NIS 91.5 million in 2007. Unit sales jumped to 634 from 151.
The company posted NIS 435.2 million revenue in 2008, more than double the NIS 208 million revenue in 2007. However, net profit fell to NIS 16.9 million in 2008 from NIS 26.7 million in 2007 and financing expenses rose to NIS 25.4 million in 2008, more than triple the 2007 figure of NIS 7.3 million.
The company had a net profit of NIS 7.6 million on revenue of NIS 129 million for the fourth quarter of 2008.
Anti-Semitism to raise demand?
The “clarifications” chapter of the financial report included some speculations on the future of the Israeli housing market. It said: "The company believes that growing signs of anti-Semitism around the world could boost apartment buying in Israel by foreign residents, despite the global economic crisis."
The company’s experts added, however, that "since in the early months of 2008, as the economic crisis in Western countries spread, demand for apartments by foreign residents has fallen, especially for luxury apartments."
Africa-Israel Residences and its partners announced that they signed contracts for the sale of 402 apartments in 2008. The total value of the sales was NIS 523 million, and the company's share amounted to NIS 318 million. These numbers are down from 2007, in which the company and its partners signed contracts for selling 603 apartments, for a total value of NIS 740 million. The company’s share then was NIS 417 million.
The company’s report also noted the possible negative effects of the recent fighting in Gaza and the shelling of southern Israel, as far as the housing market is concerned. The company estimates that Operation Cast Lead and the shelling of the south “could affect the demand for apartments in the communities of southern Israel, which were hit during the confrontation.”
The experts hint that the downward turn in demand for homes in the south is a long-term one. However, the company does not operate in the areas affected by the fighting.